China - Housing 01 (May 08 - May 10)

[winston]

Not vested.

DJ MARKET TALK: China Developers Rebound;Stock Selection Key-Citi

1452 [Dow Jones] HK-listed mainland property stocks rebound, some coming off lows in afternoon trade, tracking A-share counterparts higher on bargain-hunting. Sector lagged significantly of late due to string of newsflow on sector-tightening measures from government.

"We believe that this policy overhang would continue from now to March, until we see more clarity from the National People's Congress meeting," says Citigroup. Adds, there's likely lack of positive catalysts for residential market, as Jan., Feb. in general seasonally slow sales period.

House says stock selection key for 2010, top picks include developers that "can seize opportunities to expand in less easy environments," like China Overseas Land (0688.HK), Poly HK (0119.HK).

Broker also recommends stocks on Tier-2/3 cities, undervalued prime-landbank names, commercial plays. COL last down 0.7% at HK$16.58 but off low; Poly +2.4% at HK$10.42

Source: Dow Jones Newswire

[winston]

Cheap homes order of day by Derek Yiu, The Standard HK

Major mainland cities rushed to announce plans to boost the supply of low- cost homes after the central government outlined 11 policy directions to contain price surges.

But experts feel the municipal moves will have limited impact. ICBC International analyst John So noted that a similar pledge last year from major mainland cities saw poor execution.

"For every 100 homes expected [countrywide], fewer than 30 were built eventually. The execution was not so effective, with the exception of Shanghai," So said.

Beijing deputy mayor Chen Gang said the city has earmarked 30 billion yuan (HK$34 billion) this year for the construction of low-cost housing, while the corresponding land supply will account for more than 50 percent of the total supply, People's Daily reported.

Huang Xinjing, vice director of Guangzhou's Housing Guarantee Office, said the city will invest 3 billion yuan in building affordable homes this year, with 56,000 such homes hitting the market in the first half. Nanjing will start building 6.5 million square meters of low-cost homes this year.

Centaline (China) vice managing director Lai Kwok-keung said: "The current focus on low-cost homes cannot cool down the market. These homes have no investment value, whereas many homebuyers are indeed investing."

Both Beijing and Shanghai vowed to ensure steady growth in land supply. The capital plans to develop no less than 100 billion yuan of land to deliver 280 million sqm of private homes, while Shanghai will speed up the clearing of idle land and reduce the size of each public plot available.

Lai said even though the new plots are likely to be far from city centers, the increase in supply will signal to buyers that they do not necessarily have to put up with existing price levels.

The State Council on Sunday issued a 40 percent downpayment requirement for all second-home buyers, reducing chances of upgraders getting the small leeway they enjoyed earlier.

http://www.thestandard.com.hk/news_deta ... 00113&fc=4

[winston]

Too little too late ....

Beijing vows to cool property sector by Derek Yiu

Thursday, January 14, 2010

Top officials meeting in Beijing have vowed to control property lending and increase the supply of low-cost homes.

Vice Minister for Housing and Urban-Rural Development Qi Ji warned yesterday that illegal capital flow into the property sector is rising and called for action against malpractices by developers.

Qi said while "it's hard to say in one sentence clearly" whether there are property bubbles, "private homes are relatively costly in some cities, especially coastal ones."

There must be a higher supply of private homes this year, Qi said, especially smaller low-cost flats in places with excessive price surges.

He urged local governments to implement official second- home mortgage policies strictly to combat speculation.

Construction of around six million low-cost homes will start this year, Qi added.

( Only 6m for the whole country ? )

The State Council has said it aims to solve the housing problem of 15.4 million low- income families by the end of 2012.

Meanwhile, the China Banking Regulatory Commission warned of risks in property loans. "Loans for property development and individual mortgages now account for around 20 percent of new loans and potential or unrealized loans," said commission vice chairman Wang Zhaoxing.

Banks will carry out a comprehensive evaluation of developers to control credit risks, he said.

They will strictly abide by the 40 percent second home downpayment, tighten loans to multiple home investors or speculators and check individual borrowers' credit history.

Vice Minister of Land and Resources Yuan Xiaosu said there were about 10,000 hectares of idle plots at the end of last year, which local governments have to deal with by the end of this month.

Mainland property stocks tumbled yesterday after the central bank increased the reserve requirement ratio but developers are unruffled

Shimao Group vice chairman and executive director Jason Hui said he is positive the higher requirement will have a limited effect on developers this year.

http://www.thestandard.com.hk/news_deta ... 00114&fc=7

[winston]

How does one define a bubble ? A sharp increase in price in a short period of time ?

Mobius Says He Still Doesn’t See China Property Bubble By Anuchit Nguyen

Jan. 25 (Bloomberg) -- Investor Mark Mobius said he still doesn’t believe China is experiencing a property market bubble.

“If a property bubble means too high prices, you can see much higher prices in Australia or Hong Kong,” Mobius, who oversees $34 billion of developing-nation assets at Templeton Asset Management Ltd., told investors today in Bangkok.

And why cant there be a bubble in Australia and HK as well ?

[winston]

Not vested.

DJ MARKET TALK: MS Cuts China Property Sector View To Inline

1117 [Dow Jones] Morgan Stanley cuts China property sector view to Inline from Attractive, as turning more cautious on potential supply/demand and on more conservative stance on prices.

"We note, however, that policy fears and broad market weakness in the past two months have dragged down stock prices to a reasonably attractive level for some companies."

Tips key stock picks as Sino-Ocean Land (3377.HK) and KWG (1813.HK), rates both at Overweight. Adds, it doesn't anticipate a repeat of 2008 price war, however, reflecting a largely unchanged credit stance and decent financial health among developers; house adopts a flat price assumption in forward NAV estimates.

Source: Dow Jones Newswire

[winston]

Developers draw ire

More tightening measures including a new property tax, commandeering idle land sites, and tougher rules on the listing of developers are likely in first- tier cities, mainland media reported.

The Shanghai government recently warned it may take over land idle for more than two years, and owners of sites undeveloped for between one to two years may have to pay a fee equivalent to 20 percent of the land price.

Beijing will impose a property tax of between 0.5 percent and 1 percent.by the end of 2011, media reported yesterday.

A percentage of the valuation after discount would be charged to the owner of the premises as property tax.

The securities regulator is considering clamping down on back- door listings - the gaining of listing status by acquiring a listed firm - China Business News reported.

"Developers seeking to list should be large enough and have a track record," an official of China Securities Regulatory Commission said.

The official said the commission proposed to restrict the listing of luxury property developers, while supporting those developing cheap housing.

http://www.thestandard.com.hk/news_deta ... 00129&fc=8

[winston]

Beijing imposes further curbs on property loans by Beth Ye and Agencies

Beijing has asked commercial banks to raise the interest rate on third mortgages and hike the downpayment ratio on related lending in a bid to curb speculation in the real estate sector amid a rise in mortgage defaults, market sources said.

The China Banking Regulatory Commission warned lenders of "bubble" risks if "hot money" kept flowing into the property sector, Bloomberg cited unnamed sources as saying.

The Bank of China (3988) ordered an overall hike in interest rates on new lending to developers, becoming the first lender to respond to the commission's call yesterday on curbing real- estate loans.

Clement Luk Shing, deputy managing director of Centaline (China) Property Consultants, said Beijing's mild monetary policy last year spurred new lending of 9.59 trillion yuan (HK$10.9 trillion).

This in turn sent the average price for most mainland homes soaring by more than 50 percent. Luk said higher interest rates for third mortgages could be seen as a further tightening of monetary policy as the number of home transactions has fallen since the fourth quarter of last year. "The trading volume of property in January dropped by 50 to 60 percent when compared with November and December," Luk said.

The real estate market will stay quiet before the Lunar New Year, as people are waiting for clearer policy directives from the government, he added.

The banking regulator has told lenders to reject loan applications from buyers who intend to invest in homes for speculation, and to stop lending to developers who hoard land or do not sell the homes they built.

CBRC's Shanghai unit said banks in the city saw an increase in bad loans made to the commercial real estate last year.

CITIC Ka Wah Bank chief economist and China banking strategist Liao Qun said "asset bubbles have already formed in large mainland cities.

http://www.thestandard.com.hk/news_deta ... 00203&fc=4

[LenaHuat]

Yesterday, Premier Wen spoke again abt citizens' fear about property prices.
The commercial estate sector in many cities is already a bubble.

[winston]

Not vested

China Property Stocks ‘Worth Another Look,’ Credit Suisse Says By Shiyin Chen

Feb. 18 (Bloomberg) -- China’s property stocks, trading at the cheapest level among Asian peers, may be “worth another look,” Credit Suisse Group AG said.

Chinese real-estate shares have underperformed the MSCI China Index by almost 30 percent since July and are trading at a 7 percent discount relative to the region based on a model that values companies’ net assets and return on equity, Credit Suisse analysts Sakthi Siva and Kin Nang Chik said. This may show that risks of tightening within the nation are already factored into share prices, they wrote.

Real-estate stocks on the MSCI China Index have declined an average 6.1 percent over the past six months, compared with a gain of 4.2 percent for the broader gauge, according to data tracked by Bloomberg. China’s property prices surged the most in 21 months in January, prompting policy makers to tighten home lending and order banks to set aside larger reserves to slow credit growth.

“Within real estate, we find Chinese real estate as the most interesting from a valuation standpoint,” the analysts wrote in a report yesterday.

China Overseas Land & Investment Ltd., a developer owned by the country’s construction ministry, is Credit Suisse property analyst Jinsong Du’s top pick, while Sino-Ocean Land Holdings Ltd. is the most undervalued, according to the report. Both stocks have dropped 13 percent over the past six months in Hong Kong trading.

The People’s Bank of China said on Feb. 12 the reserve requirement will increase 50 basis points effective Feb. 25, a move that is “symbolically significant but probably has only limited impact on the real economy,” Credit Suisse economist Dong Tao said in a note this week. The ratio will probably rise another 100 basis points while both lending and deposit rates may rise 81 basis points by end-2010, he wrote.

Following a similar correction seen between April and May 2004, property shares on the MSCI China rose 58 percent by the end of the year, lagging behind only so-called diversified financials and commodity suppliers.

http://www.bloomberg.com/apps/news?pid= ... HHP3ge6LPY

[kennynah]

China has her history to tell us that she has always maintained absolute control over the population.... when th going gets rough....the CCCP can also get tough on her stance to rein in any undesired behaviour ... the population can complain all they want about higher real estate prices...if this higher prices doesn't contravene China's progress ahead... CCCP wont bother... i am very confident, with a central government, they can control almost about anything in China.... i wont ever worry about unanticipated bubbles in China...